Tom HackettThe Prime Minister has announced a second-stage $66 billion economic stimulus package building on the $17.6 billion package communicated more than a week ago.**
Set out below is what we believe will be relevant to most of our clients, at this juncture.**
FOR INDIVIDUALS
Early release of superannuation Access up to $10,000 of their superannuation in 19/20 and a further $10,000 in 20/21. Nil tax on amounts released and will not affect Centrelink payments.
Reducing superannuation minimum drawdown rates Reduction of superannuation minimum drawdown requirements for account-based pensions (and similar) by 50 per cent for 19/20 and 20/21.
Reducing social security deeming rates From 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent.
Income support payments An additional $550 per fortnightCoronavirus supplementfor both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
Core Comment: Some significant changes here for retirees! Please contact us if you feel it’s time to conduct a Review or if you need guidance on how this will impact your cashflow.
FOR BUSINESS
PAYG cashflow benefit Initial payment Eligible small and medium-sized business entities (including charities) will receive a payment equal to 100 per cent of their salary and wages withheld.
The maximum payment of $50,000 and minimum payment of $10,000 (April -June).
Additional payment An additional payment is also being introduced in the July - October 2020 period equal to the total of the initial payment they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 as total of payments.
Core Comment: Calculation and lodgement of BAS has never been more important! If we manage your BAS work, expect to receive a call soon to flesh out how this will work in practice for your business.
The ATO will deliver all payments as a credit to the entity upon lodgement of activity statements and when this puts the entity in a refund position, the ATO will deliver the refund within 14 days.
Increasing the instant asset write-off Increase in the instant asset write-off threshold (until 30 June 2020) from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).
Investment incentive Accelerated depreciation deduction of 50 per cent of the cost of an eligible asset (through to 30 June 2021) on installation for businesses with a turnover of less than $500 million.
Temporary relief for financially distressed businesses Increase in the threshold at which creditors can issue a statutory demand on a company and the time companies must respond to statutory demands they receive. Also, targeted temporary relief for directors from any personal liability for trading while insolvent.
Payroll tax relief (Queensland government) The Qld government has announced it will immediately refund two months’ worth of payroll tax and waive the next three months payroll tax.
[You need to pay payroll tax in Queensland if you are an employer (or group of employers) with taxable wages exceeding a threshold of $1.3 million a year]
Core Comment: This is something to consider if, despite the impacts of Coronavirus, you are looking at a profitable 19/20 year. Banks are also currently offering very competitive rates for secured and unsecured loans.
Our knowledgeable accounting and wealth advisors can help you navigate the evolving government assistance initiatives and guide you on how you can benefit.